The Okast: Commercial Real Estate in 2020-21 with Stuart Appley, CBRE
This week we are excited to introduce you to Okapi AI’s new podcast. The Okast is where you can find discussions with commercial real estate thought leaders about CRE, technology – and everything in between. You can find The Okast on Apple Podcasts, Spotify and almost anywhere you listen to podcasts (Google Podcasts coming soon).
For our first episode, we were happy to (virtually) sit down and chat with Stuart Appley, Managing Director at CBRE and advisor at Okapi AI. Here are some highlights from our discussion:
On the Connection of Real Estate and Technology:
Commercial real estate was behind when it came to digital transformation. It started from moving to the cloud with Outlook and office 365 and it was clear the industry was lagging. That’s also been the way with data and how they look at data and how they automate. There are so many pieces to the industry, not just a fragmentation of the owner, but the segments: You got the leasing side, the program manager side, the investment side, the finance side… Then you’ve got the investors and some are private, some are REITs, and so it makes it a very complex ecosystem. And i think it’s really only been last maybe five to seven years that PropTech has started to address those in a transformative way, and we’re starting to see some great companies. You’re also seeing the huge rise of investments into the industry, both by regular VCs like Lightspeed, Blumberg Capital and OpenView among many. That means it’s no longer a purely niche category on the investment side. That brought the potential of AR, virtual reality, IoT and what’s happening today around workspace.
On Applying AI for Commercial Real Estate:
Data governance and having quality data have always been an issue in CRE. Historically reporting and getting insights from data have always been backward-looking . That doesn’t really help give insights into what you should be doing now, and I just see such a huge value in both: Predictive AI which is telling you what they what might happen, and prescriptive AI to tell on you “hey, this is going to happen, and these are the steps you should take to really augment the way we work. Make us work faster, smarter, more efficient”. There are a lot of inefficiencies in things we do. There’s things that take multiple steps where AI can help with automation of those steps and making the engagements more meaningful and useful and user friendly. There are a lot of applications for prescriptive AI: They can also be around Transactions making recommendations on where you might want to invest, it might point to specific areas or point to “your next investment should be in this location because of x. y. z.” It might be learning from notes brokers take and suggesting things like “Hey, you’ve talked to these three people, you might want to get back to this one person because of another transaction that’s in your portfolio”. It’s really is about recommendations on actions that you should take based on the history.
On How 2020 Transformed the Need of CRE for Technology – and the Industry’s Tech-readiness:
We have more progress for digital transformation this year than past five years combined. I’d say early in the year in certain people’s mindsets it was kind of the same conversation. People can be skeptical. They underestimate some of these technologies. They’re too busy. They think “I’ve got a great relationship with my leasing team. I don’t need this now.” All of a sudden we’ve all been transformed and there’s realization that you can work from home and that technologies now support it. People are just just more open to listen. At the same time there are new FM related technologies like robotics around to keep spaces clean, devices to collect data – understand if people are keeping six feet apart, are there too many people congregating in the kitchen, is there a line outside a bathroom.
So if you’d said these were some scenarious a year ago people said oh so future. That’s five years down the road people get it.
They realize it and they’re open to understanding and try piloting some of these newer technologies because people are hungry for new solutions to go back to the office and be efficient in today’s world. For example. looking at companes that monitor air quality now that we understand what our viruses that might be in the air. That’s a perfect example of a complete shift in interest and adoption of technology.
On Moving from WFH to Work-from-Anywhere and Going Back to the Office:
I think what’s clear is people who didn’t understand that you could work from home before, now understand. But people miss being around each other right so it’s it will never go back to everyone having to come into the office but it’s also not going to be like it is today. People want to get back with people, they want that flexibility. But in order to lead and collaborate you’ll always need those opportunities to get together. it’s clear it’s going to be 2021 before we get back to 30-50% in the office. Companies will continue accepting people working from anywhere – not just home. There will be flexibility to work from anywhere but having a place where people can go to out to be: whether it’s CBD, hub and spoke, remote locations for meetings.